Daiichi Sankyo Co Ltd Q3 2025 Earnings Presentation Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Hidemaru Yamaguchi - Citi - Analyst : (spoken in foreign language) REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 31, 2025 / 6:00AM, 4568.T - Q3 2025 Daiichi Sankyo Co Ltd Earnings Presentation

Question: Hidemaru Yamaguchi - Citi - Analyst : (interpreted) I had another question, development milestone or regulatory part TL-01 Europe. But this time I think it's withdrawn, so what is your plan as a next step? And HER3 (inaudible) approval, I think it's delayed. Last year in June, I think a complete response was provided, and what is the current situation? I'd like to have these two points update.

Question: Hidemaru Yamaguchi - Citi - Analyst : (interpreted) No, no, TL-01 development status in Europe or for Europe.

Question: Hidemaru Yamaguchi - Citi - Analyst : How about Europe tier 01 withdrawn? How are we going to do? Are we going to do the same thing like FDA?

Question: Hidemaru Yamaguchi - Citi - Analyst : Okay, thank you. (spoken in foreign language)

Question: Seiji Wakao - JPMorgan Securities - Analyst : (interpreted) I am Wakao from JPMorgan. Thank you for this presentation. This is a follow up on Yamaguchi-san's question on your forecast in the mid-term business plan. So JPY2.1 trillion for the revenue, and it's within the reach. If you look at the contents, it's JPY1 trillion for oncology, and that Dato-DXd TL-01 has been withdrawn, but then ENHERTU is doing very well. But what about DB-06? It's been approved, and sales is going to expand. And ENHERTU sales is very good right now, but Dato-DXd, in the absence of that and HER-3's delay, can you really do JPY1 trillion for oncology? Or within JPY2.1 trillion, do you have a different composition now?

Question: Seiji Wakao - JPMorgan Securities - Analyst : (interpreted) So DB-06, this is a future thing. But if you look at the progress so far, ENHERTU can probably make up for the loss of Datroway. Is that your understanding?

Question: Seiji Wakao - JPMorgan Securities - Analyst : (interpreted) And in terms of the revision, I couldn't fully understand understood the point. Because for each product, if you put all together, I think JPY31 billion upward revision is possible and milestone is JPY1.1 billion revision downward. So all in all, net-net, it has to be upward revision, but then you have not changed operating profit. I didn't really understand the reason why. So are there any other negative factors at play? How could I understand this?

Question: Seiji Wakao - JPMorgan Securities - Analyst : (interpreted) And in relation to that, in the third quarter, the cost of sales ratio has really deteriorated looking at Q on Q, not Y on Y. And if you look at the other sales revenue, it looks like it's a negative figure. And is it due to the vaccine sales, sluggish vaccine sales, or that's nothing to do with the vaccine?

Question: Seiji Wakao - JPMorgan Securities - Analyst : (interpreted) What about DAICHIRONA, is that also included? Is that also a negative factor?

Question: Seiji Wakao - JPMorgan Securities - Analyst : (interpreted) Okay. And finally AVANZAR study and the same population Phase 1, 04 study and you are using QCS MR, are you going to use it or not? And are you able to make an announcement regarding that or not? And what is the significance of doing that? I think you are trying to set the threshold for that, but I'd like to once again know a little more about that. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 31, 2025 / 6:00AM, 4568.T - Q3 2025 Daiichi Sankyo Co Ltd Earnings Presentation

Question: Seiji Wakao - JPMorgan Securities - Analyst : (interpreted) Okay, so you're not making announcement, so you are not going to let us know. Okay, that's all, thank you.

Question: Stephen Barker - Jefferies - Analyst : (interpreted) Hi, Barker from Jefferies Securities. Regarding I-DXd, I'd like to ask you a question. The (inaudible) new clinical trials introduced today, in that tumor type, what is the percentage of the patients expressing the B7-H3 expressions? And I want to screen this expression level and recruit patients for those studies.

Question: Stephen Barker - Jefferies - Analyst : (interpreted) Thank you very much. That's all.

Question: Taito Kurose - Nikkei Newspaper - Analyst : (interpreted) Thank you. I am Kurose from Nikkei Newspaper. I have a question to Okuzawa-san regarding the new appointment as CEO. So back in 2023, you became President. And in the past two years what are the focuses of your work, and what's your aspiration going forward as new CEO? Hiroyuki Okuzawa - Daiichi Sankyo Co Ltd - President, Executive President, Chief Operating Officer, Representative Director (interpreted) Thank you. I became CFO back in 2021, and that was the first year for the fifth mid-term business plan, and I was CFO for five years. And in 2023, 2024 as the COO, I worked on this mid-term business plan. For the total of four to five years, I have been leading this mid-term business plan together with CEO, Manabe. And during this time we had a major decision made which is the collaboration and partnership with MRK, and then different organizations within the company. I listened to them, and then I evaluated pros and cons to come to the conclusion for that partnership. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 31, 2025 / 6:00AM, 4568.T - Q3 2025 Daiichi Sankyo Co Ltd Earnings Presentation And then in the Chair of President and COO, I myself forecasted and committed to the enhancement of human resources development. And in the first year of being appointed, I looked at all of their functions within Japan, and from the second year, US, Europe as well as China, I visited all of their sites, and I covered almost 90% of the employees in terms of my reach and explain with my own words the current state of Daiichi Sankyo and the future vision of the company. And through doing that, our innovative and inclusive corporate culture has been nurtured and that was always at the back of my mind. And going forward, talking about my aspiration, I have always been committed to the future fifth mid-term business plan, and next year will be the last year of this plan. We have been attracting a lot of questions about this plan today as well, so we would like -- I would like to make sure that we achieve all of the KPIs of this plan, so that's the first top priority. And then starting 2026, we need to have the next five year mid-term business plan, and the discussions for that have already started. So I would like to lead the discussions. And by 2030, in oncology, we would like to become one of the top 10 companies in the area of oncology, so I would like to solidify that target. And beyond 2030, our sustainable growth needs to be secured. And together with Abe-san, I would like to enhance our power to discover and develop drugs even further, and I'd like to make very strong commitment in doing that as a CEO.

Question: Shinichiro Muraoka - Morgan Stanley - Analyst : (interpreted) Thank you very much. Muraoka, Morgan Stanley. I have a question to Ogawa-san first, and it is also a follow up of Wakao-san's question maybe, that there are some points not answered. Deducting all the segments, the others business part numbers seems somewhat strange. And I think vaccines, it's understandable, however, there is about JPY20 billion, a downward change seen in the numbers. Do we have to worry about this too much, or is there any major changes in your forecast, or is it a kind of a buffer? Please tell this on this point.

Question: Shinichiro Muraoka - Morgan Stanley - Analyst : (interpreted) That's right. We don't see any major risks there. Thank you. My second question is about R&D, DB-06 approval, congratulations. And going forward, in the medical practice there will be, I think, changes, if it becomes available for outer law, even HER2 testing missing, do you think that your product will be utilized in the practice or the guideline will be changing? Or at any rate everyone will get HER2 testing therefore it's not a big issue. How should we view this? I believe that there is no negative, but what are the positive degree of this approval?

Question: Shinichiro Muraoka - Morgan Stanley - Analyst : (interpreted) Thank you very much. That's all.

Question: Fumiyoshi Sakai - UBS - Analyst : (interpreted) Thank you. I am Sakai from UBS Securities. I have two questions. First, DS-2234 with MRK, MK-6070 and DS-7300, I think a combination a trial Phase 1/2 is ongoing right now, and DS-2234, the target engagers are different, therefore probably the target cancer types may be different, and you'll be exploring that. What is the target of having this DS-2234? I'm sorry about this, a very broad based question, but what would be your target going forward? Outside of (inaudible) there is a very high binding, and including that kind of a characteristic and is there any difference in concept in this collaboration with MRK?

Question: Fumiyoshi Sakai - UBS - Analyst : (interpreted) Thank you very much, understood. So the priority is really going to be shifting towards 2243?

Question: Fumiyoshi Sakai - UBS - Analyst : (interpreted) Thank you very much. I have another question, and it's a very basic question. I'm sorry and it's a kind of a rudimentary question. And in HER2 material, NCCN guideline updates are written. and there is a list of a lot of different cancer types here. And how are you handling those updates, like the pancreatic cancer and also other adenocarcinoma, small bowel adenocarcinoma, you don't have indications for that. And how American physicians are treating those other cancer types?

Question: Fumiyoshi Sakai - UBS - Analyst : Yes. Okay, I need to dig in a little bit more. But you're not going to actively promote all these non-approved tumors, right? So it's a physician's choice, if you like.

Question: Fumiyoshi Sakai - UBS - Analyst : Right. Okay, very clear. Thank you very much.

Question: Hiroshi Wada - SMBC Nikko Securities Inc. - Analyst : (interpreted) SMBC Nikko Securities, can you hear me okay?

Question: Hiroshi Wada - SMBC Nikko Securities Inc. - Analyst : (interpreted) Thank you. I have two questions. In page 31, AVANZAR study results publication, what is the timing. Looking at ENHERTU, it's like in the first half or second half of the fiscal year but AVANZAR study it says second half of FY 2025. Is it like from July to September time frame? That's my assumption. So could you tell me the timing of publication of AVANZAR study results?

Question: Hiroshi Wada - SMBC Nikko Securities Inc. - Analyst : (interpreted) Understood. Thank you very much. Another question is about DS-2243 T-cell Engager. Looking at the patients, how many patients do you have or what kind of percentage of patients do you have this expression. and HLA-A2 NY-ESO peptide is detected by this antibody, I think, and how broadly indication will be. So the indicator HLA-24 or 03 or A-A02, I think it's only 20% in Japanese patients, so it is applicable to other HLAs because if it is antibodies binding to this HLA-02 that seems to be challenging.

Question: Hiroshi Wada - SMBC Nikko Securities Inc. - Analyst : (interpreted) Thank you very much. And epitope, I think varies from person to person. Within NY-ESO, which kind of epitope would you use? And even in HLA-A2, I think depending upon epitope, the target patient may be further limited. Is that right? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 31, 2025 / 6:00AM, 4568.T - Q3 2025 Daiichi Sankyo Co Ltd Earnings Presentation

Question: Hiroshi Wada - SMBC Nikko Securities Inc. - Analyst : (interpreted) Depending on the person, NY-ESO amongst these proteins, I think there could be different epitopes detected. And as a result I am worrying that there will be a further narrow down of the patient population.

Question: Hiroshi Wada - SMBC Nikko Securities Inc. - Analyst : (interpreted) Thank you. And just for final confirmation, regarding generalization of this technology, five or nine epitope binding antibodies, I think is the antibody that you have. So it could be generalized, right?

Question: Hiroshi Wada - SMBC Nikko Securities Inc. - Analyst : (interpreted) I agree. Thank you very much. That's all.

Question: Miki Sogi - Sanford C. Bernstein Limited - Analyst : (spoken in foreign language) Thank you very much. Can you hear me okay?

Question: Miki Sogi - Sanford C. Bernstein Limited - Analyst : So this is a question regarding I-DXd program. So the, a few things, so I-DXd, now you are saying that there will be a Phase 2 readout from the ongoing I-DXd -- I think Ideate-El01. Is this the results coming from the additional 70 patients you added to the initial ongoing program? And also based on that data, is there's a possibility that you might consider the filing for accelerated approval for the third line plus small cell lung cancer? So that's one question. And the secondly, and also you also mentioned about the combination study with the I-DXd plus MK-6070 for relapse and refractory small cell lung cancer. But we thought that actually -- alternatively this combination can be or should be tested for a first line setting. So this phase 1b/2 design does not necessarily exclude the possibility that this combination will be tested in first line in pivotal trial. So those are the questions for I-DXd. Thank you.

Question: Miki Sogi - Sanford C. Bernstein Limited - Analyst : Okay, thank you. And finally for the T-cell Engager bispecifics DS-2243, is this the modality coming from Daiichi Sankyo, and you do have the modality platform beyond this one particular molecule?

Question: Miki Sogi - Sanford C. Bernstein Limited - Analyst : Thank you very much. Kentaro Asakura - Vice President, Corporate Communications Department - Vice President, Corporate Communications Department (interpreted) Thank you. We already surpassed the expected closing time, so we would like to close and finish Q&A. We understand that there are still people raising their hand, but please give questions to our investor relations.